Wahahah to Wacarcar: Chinese drinks company branches out into automotive

By RJ Whitehead

- Last updated on GMT

China’s biggest beverage manufacturer Wahaha intends to enter car manufacturing and  has has set up a new subsidiary. ©Getty Images
China’s biggest beverage manufacturer Wahaha intends to enter car manufacturing and has has set up a new subsidiary. ©Getty Images

Related tags: China, automotive, car, expansion

China’s biggest beverage manufacturer Wahaha intends to enter car manufacturing and has has set up a new subsidiary - the Zhejiang Deqing Haha Technology Innovation Centre Co. Ltd.

The move registered on China’s equally well-named National Enterprise Credit Information Public System at the end of August, with a low registered capital of RMB50m.

The Hangzhou Wahaha offshoot aims to capitalise on next-generation sensor technology, advanced facility manufacturing and new materials, as well as compact and intelligent vehicle technology, and energy conservation and environmental protection materials.

This is a huge move for Wahaha, which already has around 150 subsidiaries and 60 manufacturing bases across China and focuses on manufacturing a wide range of drinks, including bottled water, teas, fruit juices and yoghurt beverages.

The car brand will place its emphasis on so-called neighbourhood electric vehicles and intelligent vehicle technology, which has been developing quickly in China. Following a move by the government to incentivise the electric segment, which has been growing massively over the last couple of years, sales this year have sored in the triple-digits, year on year.

Other startups in the segment include NIO and XPENG Motors, as well as household appliance manufacturers LeEco and GREE, and real estate companies like Baoneng Group, Evergrande Group and Wanda Group.

Analysts from Gasgoo Auto Research Institute forecast that sales of electric passenger vehicles are expected to increase to 1.7m units in 2020, and nearly 4m units by 2023. Come 2025, 6.5m will be on China’s roads, benefitting from a series of favourable regulations and policies released recently.

While all this sounds positive, there might be a bureaucratic hitch. Wahaha requires governmental approval for this change in tack, and such a business cannot be operated formally unless it has the rubber stamp of business authorities. It is currently too early to judge whether a Wahaha electric vehicle would make it to reality.

Zong Qinghou, chief executive of Wahaha and once China’s richest man, has a deep interest in technology. Last year, he pledged to set up an artificial intelligence centre in Israel with funding of at least US$10m over five years.

The research centre will focus on improving the camera lens behind driverless cars as major automobile companies and tech firms race to perfect the technology in the multi-billion dollar autonomous vehicle market.

If Wahaha’s automotive project does get off the ground, it will perhaps use this technology to gain a head start on more established automotive players.

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